Alert from Wisconsin Department of Financial Institutions Part 3

Posted on Mon Feb 11th, 2013 at 2:25 pm

Firm scamming Wisconsin businesses, attorney general's office says

By Gitte Laasby of the Journal Sentinel

Feb. 10, 2013

The State of Wisconsin is seeking penalties against the Mandatory Poster Agency Inc. and its owners, Thomas Fata and Steven J. Fata, accusing them of sending "corporate minutes" forms to Wisconsin businesses and falsely implying that the form was required by the state.

Documents from attorneys general's offices and court records suggest that the company, which does business in this state under the name Corporate Records Service in Wisconsin, is a serial scammer. The Mandatory Poster Agency has paid well over $100,000 in the past seven years to settle allegations that it perpetrated other document scams under various other names in at least 18 states.

In most of those cases, the state's attorney general alleged that direct mail solicitations from the company's aliases looked like government notices or created a false impression that businesses had to pay for mandatory signs - such as signs reminding employees to wash their hands - that were available from the government free.

The Michigan-based company has actively been scamming businesses in Wisconsin out of $125 fees since at least Jan. 28, the Wisconsin attorney general's office said in a news release Friday.

Corporate Records Service mails the businesses a green envelope with two documents that look and feel like government documents - a "2013 Annual Minutes Form" that contains the business' corporation number and one page of instructions. The business is asked to mail the form along with the fee to an address in Madison by a certain deadline. Unknown to businesses, the address is for a UPS Store box and the mail is forwarded to Lansing, Mich., where the Mandatory Poster Agency is based.

Dana Brueck, a spokeswoman with the Wisconsin attorney general's office, wouldn't say exactly how many Wisconsin businesses fell for the scam, only that some paid.

George Althoff, a spokesman for the Wisconsin Department of Financial Institutions, said his agency has received about 250 inquiries about the form from state businesses since the agency sent out a scam alert about it last week. At the time, state officials and the Wisconsin Better Business Bureau told businesses that despite the official look, the form was not required.

What may have tricked business owners is that the form cites a state statute out of context, which gave businesses the impression that Wisconsin law requires them to file annual minutes. "Rather, Wisconsin law provides that if a corporation chooses to prepare minutes of its annual meeting, those minutes must be retained permanently," the state's complaint against Mandatory Poster Agency states.

The Department of Financial Institutions doesn't require a corporation to file minutes of annual meetings. It does require corporations to file an annual report with information about the corporation and its activities and ownership, but the information on the form wouldn't satisfy those requirements, according to the complaint.

Corporate Records Service offers to prepare the business' minutes, but proper minutes would require someone to have actually attended the meeting, and the company couldn't provide that based on the information that businesses supply on the form, the complaint states.

In a news release Friday, the Wisconsin attorney general's office called statements on the form and the envelope "untrue, deceptive or misleading."

The state is seeking an injunction to stop the mailings and civil fines of between $50 and $200 per violation plus restitution to the victims.

Among the biggest enforcements against the company: The owners paid $50,000 to resolve claims of consumer fraud and false advertising brought by North Dakota's attorney general in 2008.

At the time, officials said there had been at least 24 settlements between the Fatas and various state and federal law enforcement agencies since 2001.

Other states where Mandatory Poster Agency or its aliases have been in trouble for scams involving posters or signs related to labor laws and health requirements, according to the attorneys general documents and court records: Iowa, Illinois, Washington, Tennessee, Michigan, North Carolina, West Virginia, Pennsylvania, Idaho, Montana, Utah, Kentucky, Arkansas, Missouri, Florida and Vermont.

The company has also been criticized for selling overpriced deeds at nearly $50 each in Michigan when they were available for about $3 from county government.

Business owners who have questions about the forms can contact the Wisconsin Department of Financial Institutions at (608) 266-1622. Complaints can also be filed with the Better Business Bureau.

Follow the Public Investigator on Twitter @GitteLaasbyMJS. Read the PI blog at jsonline.com/piblog.

The information contained in this document is intended for the sole purpose of providing general legal information and is not intended as legal advice of any kind. This information may not apply to your specific issue, therefore, do not act upon this information without consulting Zimmerman & Steber Legal Group, S. C. or another qualified attorney.

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